Business Studies I Chapter 7 Directing

Meaning: Directing refers to instructing, guiding, communicating and inspiring people so that the objectives can be achieved.

Importance: The importance of direction is highlighted through the following facts:

(i) It Initiates Action: The employees are appointed up to the first three functions of management (planning, organising and staffing). But they cannot commence their job until they are not informed about what to do and how to do. This job manager performs through direction. Thus, it is evident that it is direction which initiates action in an organisation.

(ii) It Integrates Employees’ Efforts: Many employees work in an organisation. If any one of employees in the employees’-chain does not perform up to the mark, it adversely affects the performance of remaining employees. Thus, it is essential to establish coordination among all the activities. Manager establishes this coordination by supervising, providing good leadership, motivating and exchanging ideas with his subordinates.

(iii) It is the Means of Motivation: The objectives of an organisation can only be achieved by motivated employees. Motivated employees work with full dedication and with a feel of belongingness. Now the question is how can the employees be motivated? The work of motivating employees can be accomplished through the Directing function of management.

(iv) It Facilitates of Implementation Changes: Oftenly, employees show resistance to change in their organisational structure. But with the changing demand of time, it needs to be implemented/enforced. Managers through the medium of Direction shape the mindset of the employees in a manner that they willfully accept changes.

(v) It Creates Balance in the Organisation: Sometimes there is a clash between individual and organisational objectives. Directing helps to settle down these clashes and creates a balance in the organisation. On the one hand, a person works in an organisation for the fulfilment of his objectives like higher salary, promotion, etc. On the other hand, the objectives of a company can be to earn higher profits, more market share etc. Managers through direction tell employees, how they can fulfil their objectives while achieving organisational objectives.

Yes, I do agree with this statement. Following are the reasons of it:

(i) It Initiates Action: The employees are appointed up to the first three functions of management (planning, organising and staffing). But they cannot commence their job until they are not informed about what to do and how to do. This job manager performs through direction. Thus, it is evident that it is direction which initiates action in an organisation.

(ii) It Integrates Employees’ Efforts: Many employees work in an organisation. If any one of employees in the employees’-chain does not perform up to the mark, it adversely affects the performance of remaining employees. Thus, it is essential to establish coordination among all the activities. Manager establishes this coordination by supervising, providing good leadership, motivating and exchanging ideas with his subordinates.

(iii) It is the Means of Motivation: The objectives of an organisation can only be achieved by motivated employees. Motivated employees work with full dedication and with a feel of belongingness. Now the question is how can the employees be motivated? The work of motivating employees can be accomplished through the Directing function of management.

(iv) It Facilitates of Implementation Changes: Oftenly, employees show resistance to change in their organisational structure. But with the changing demand of time, it needs to be implemented/enforced. Managers through the medium of Direction shape the mindset of the employees in a manner that they willfully accept changes.

I do not agree with this statement. Following are the reasons:

(i) It Initiates Action: The employees are appointed up to the first three functions of management (planning, organising and staffing). But they cannot commence their job until they are not informed about what to do and how to do. This job manager performs through direction. Thus, it is evident that it is direction which initiates action in an organisation.

(ii) It Integrates Employees’ Efforts: Many employees work in an organisation. If any one of employees in the employees’-chain does not perform up to the mark, it adversely affects the performance of remaining employees. Thus, it is essential to establish coordination among all the activities. Manager establishes this coordination by supervising, providing good leadership, motivating and exchanging ideas with his subordinates.

No, I do not agree with this statement as directing is the most important function of management. It is also known as management-in-action. In support of my answer, I can give the following reasons:

(i) It Initiates Action: The employees are appointed up to the first three functions of management (planning, organising and staffing). But they cannot commence their job until they are not informed about what to do and how to do. This job manager performs through direction. Thus, it is evident that it is direction which initiates action in an organisation.

(ii) It Integrates Employees’ Efforts: Many employees work in an organisation. If any one of employees in the employees’-chain does not perform up to the mark, it adversely affects the performance of remaining employees. Thus, it is essential to establish coordination among all the activities. Manager establishes this coordination by supervising, providing good leadership, motivating and exchanging ideas with his subordinates.

(i) Directing is Related to the Human Factor: Directing mainly consists of issuing instructions to subordinates and guiding them. Both these activities are directly related to the human factor. It is the human factor only which utilises the other non-productive factors of production.

(ii) Directing is a Group of Various Functions: Directing is not a single function, but it consists of a number of functions, which include supervision, leadership, communication and motivation.

It Creates Balance in the Organisation: Sometimes there is a clash between individual and organisational objectives. Directing helps to settle down these clashes and creates a balance in the organisation. On the one hand, a person works in an organisation for the fulfilment of his objectives like higher salary, promotion, etc. On the other hand, the objectives of a company can be to earn higher profits, more market share etc. Managers through direction tell employees, how they can fulfil their objectives while achieving organisational objectives.

It is important to distinguish between two almost similar words — ‘Managing’ and ‘Directing’. ‘Managing’ is a wide concept and under it, apart from ‘directing’, the functions like planning, organising, staffing, and controlling are included. On the other hand, ‘Directing’ is a limited concept and is only a part of the managing. It is, therefore, clear that if some manager is full of the quality of directing, he can prove to be an effective manager but other managerial functions too shall have to be completed.

Directing.

The scope of managing is wider as directing is a component of it.

Human factor.

It refers to instructing, guiding, communicating and inspiring people to achieve common objectives.

The first three functions of management (planning, organising and staffing) prepare a stage for action, directing implements it in the organisation.

Because it initiates action in the organisation.

Following are the main principles of directing:

(i) Principle of Maximum Individual Contribution: According to this principle, management should adopt that directing policy through which employees get motivated and give their maximum individual contribution for the achievement of organisational objectives.

(ii) Principle of Harmony of Objectives: According to this principle, there must be full coordination between organisational and individual objectives. Employees work in an organisation with an objective to get better remuneration, promotion, etc. On the other hand, organisational goal can be to earn more profits and to increase market share. Management here must establish coordination between the objectives of both the parties/factors by adopting suitable method of direction.

(iii) Principle of Unity of Command: According to this principle, a subordinate should get directions from one officer at a time. If the subordinate gets directions from more than one officer, the subordinate will be unable to prioritise his work. As a result, situation of confusion, conflict and disarrangement is emerged. By following this principle, effective direction takes place.

(iv) Principle of Appropriateness of Direction Technique: According to this principle, appropriate direction techniques should be used, like to supervise effectively, to provide able leadership, to adopt free communication and to motivate through right medium.

(v) Principle of Managerial Communication: According to this principle, it should be monitored by the management that the subordinates get the same meaning for what has been said. This simplifies the job of the subordinates and they need not go to the managers, repeatedly for enquiring.

(vi) Principle of Use of Informal Organisation: According to this principle, there must be a free flow of information between seniors and subordinates. Information should be disbursed both through formal and informal mediums. Special attention should be given to the informal organisation. This strengthens formal organisation.

Following are the elements of directing:

(i) Supervision: It refers to monitor the progress of routine work of one’s subordinates and guiding them properly. Supervision is an important element of the directing function of management. Supervision has an important feature that face-to-face contact between supervisor and his subordinate is a must.

(ii) Communication: It refers to an art of transferring facts, ideas, feeling, etc. from one person to another and making him understand them. A manager has to continuously tell his subordinates about what to do, how to do, and when to do various things. Also, it is very essential to know their reactions. To do all this, it becomes essential to develop effective telecommunication facilities. Communication by developing mutual understanding inculcates a sense of cooperation which builds an environment of coordination in the organisation.

(iii) Leadership: It refers to influence others in such a manner to do work what the leader wants them to do. Leadership plays an important role in directing. Only through this quality, a manager can inculcate trust and zeal among his subordinates.

(iv) Motivation: It refers to that process which excites people to work for attainment of desired objective. Among the various factors of production, it is only the human factor which is dynamic and provides mobility to other physical resources. If human resource goes static then other resources automatically turn immobile. Thus, it becomes essential to motivate human resource to keep them dynamic, aware and eager to perform their duty. Both monetary and non-monetary incentives are given to employees for motivation.

Following are the main principles of directing:

(i) Principle of Maximum Individual Contribution: According to this principle, management should adopt that directing policy through which employees get motivated and give their maximum individual contribution for the achievement of organisational objectives.

(ii) Principle of Harmony of Objectives: According to this principle, there must be full I coordination between organisational and individual objectives. Employees work in an organisation with an objective to get better remuneration, promotion, etc. On the other hand, organisational goal can be to earn more profits and to increase market share. Management here must establish coordination between the objectives of both the parties/factors by adopting suitable method of direction.

(iii) Principle of Unity of Command: According to this principle, a subordinate should get directions from one officer at a time. If the subordinate gets directions from more than one officer, the subordinate will be unable to prioritise his work. As a result, situation of confusion, conflict and disarrangement is emerged. By following this principle, effective direction takes place.

(i) Principle of individual maximum contribution.

(ii) Principle of harmony of objectives.

It refers to see to what extent the employees are following the management.

(i) Supervision (ii) Leadership

Four

No, I do not agree with this statement. Following are the reasons of it:
(i) Facilitates Control: Under supervision, supervisor keeps a close eye on his subordinates. Wherever he finds any flaws in the work-in-progress, he rectifies them then and there itself. From time to time deviations are noted by comparing actual work performance and the desired work performance. Corrective measures are taken if the need is felt. In this manner, supervision assures control.

(ii) Optimum Utilisation of Resources: Under supervision, all the activities are closely monitored. In this situation, better utilisation of all the resources like human, material, machinery, etc. takes place. The problem is at once solved because the employees are always under a close watch. As a result, they start doing effective work in minimum possible time.

(iii) Maintenance of Discipline: Close eye and timely guidance of the employees teaches them a lesson of discipline. When special attention is given to the employees during their work and their every problem is solved at the first instance, this builds pressure on their mind to maintain discipline.

(iv) Feedback: During supervision, a supervisor is always in direct contact with his subordinates. As a result, ideas, suggestions, complaints, etc. of employees with regard to managerial decisions are continuously received by the supervisor. This facilitates the process of receiving feedback and helps to take better managerial decisions.

(v) Improves Communication: Whenever a situation of dispute arises between any two parties, the main reason for it is lack of communication. Under supervision, supervisor gives orders and directions to his subordinates. Also, he, in turn, receives feedback from them. On the other hand, subordinates communicate their ideas, suggestions, complaints, etc. to the supervisor. In this manner, a friendly atmosphere is created between both the parties. This strengthens free communication.

(vi) Improves Motivation: Every employee aspires to see himself as an important part of the organisation. During supervision, a supervisor divides the work in a manner that makes every person feel the responsibility for an important job in the organisation. By getting this kind of importance, an employee feels motivated and he takes his responsibility with more diligence.

(i) Improves Communication: Whenever a situation of dispute arises between any two parties, the main reason for it is lack of communication. Under supervision, supervisor gives orders and directions to his subordinates. Also, he, in turn, receives feedback from them. On the other hand, subordinates communicate their ideas, suggestions, complaints, etc. to the supervisor. In this manner, a friendly atmosphere is created between both the parties. This strengthens free communication.

(ii) Improves Motivation: Every employee aspires to see himself as an important part of the organisation. During supervision, a supervisor divides the work in a manner that every person feels the responsibility for an important job in the organisation. By getting this kind of importance, an employee feels motivated and renders his responsibility with more diligence.

No, I do not agree with this statement. Following are the reasons of it:

(i) Facilitates Control: Under supervision, supervisor keeps a close eye on his subordinates. Wherever he finds any flaws in the work-in-progress, he rectifies them then and there itself. From time to time deviations are noted by comparing actual work performance and the desired work performance. Corrective measures are taken if the need is felt. In this manner, supervision assures control.

(ii) Optimum Utilisation of Resources: Under supervision, all the activities are closely monitored. In this situation, better utilisation of all the resources like human, material, machinery, etc. takes place. The problem is at once solved because the employees are always under a close watch. As a result, they start doing effective work in minimum possible time.

According to Viteies, “Supervision refers to the direct and immediate guidance and control of subordinates in the performance of their task”.

In conclusion, it may be said that in supervision, the supervisor maintains a strict vigil on the work of his subordinates, and if needed guides them also, so that plans may be implemented.

Supervision refers to monitoring the progress of work of one's subordinates and guiding them properly. The word ‘supervision’ is formed by joining two words ‘super’ and ‘vision’. The former means best and the latter means view. Hence, the literal meaning of supervision is best view, i.e., maintaining the best view possible on the work of one’s subordinates. Supervision includes both looking into the work of subordinates as well as guiding them properly.

(i) It is a universal activity performed at all levels of management.

(ii) It is an important part of the directing function of management.

(iii) It is a continuous process since supervision is required at all times.

(i) Facilitates Control: Under supervision, supervisor keeps a close eye on his subordinates. Wherever he finds any flaws in the work-in-progress, he rectifies them then and there itself. From time to time deviations are noted by comparing actual work performance and the desired work performance. Corrective measures are taken if the need is felt. In this manner, supervision assures control.

(ii) Optimum Utilisation of Resources: Under supervision, all the activities are closely monitored. In this situation, better utilisation of all the resources like human, material, machinery, etc. takes place. The problem is at once solved because the employees are always under a close watch. As a result, they start doing effective work in minimum possible time.

Under supervision, supervisor keeps a close eye on his subordinates. Wherever he finds any flaws in the work-in-progress, he rectifies them then and there itself. From time to time deviations are noted by comparing actual work performance and the desired work performance. Corrective measures are taken if the need is felt. In this manner, supervision assures control.

Under supervision, all the activities are closely monitored. In this situation, better utilisation of all the resources like human, material, machinery, etc. takes place. The problem is at once solved because the employees are always under a close watch. As a result, they start doing effective work in minimum possible time.

(i) Facilitates Control: Under supervision, supervisor keeps a close eye on his subordinates. Wherever he finds any flaws in the work-in-progress, he rectifies them then and there itself. From time to time deviations are noted by comparing actual work performance and the desired work performance. Corrective measures are taken if the need is felt. In this manner, supervision assures control.

(ii) Optimum Utilisation of Resources: Under supervision, all the activities are closely monitored. In this situation, better utilisation of all the resources like human, material, machinery, etc. takes place. The problem is at once solved because the employees are always under a close watch. As a result, they start doing effective work in minimum possible time.

(iii) Maintenance of Discipline: Close eye and timely guidance of the employees teaches them a lesson of discipline. When special attention is given to the employees during their work and their every problem is solved at the first instance, this builds pressure on their mind to maintain discipline.

Difference between Direction and Supervision

A supervisor is a person who oversees what is being done by subordinates and gives instructions to ensure optimum utilisation of resources.

To all the three levels.

(i) Ensures issuing instructions

(ii) Facilitates control.

Through close eye and timely guidance of the employees.

The supervisor is a link between management and the operatives as he conveys management ideas to the operatives (workers) on one hand and operatives problems to the management on the other.

It refers to the process which excites people to work for the attainment of a desired objective.

According to Koontz and O’Donnell, “To motivate is to induce people to act in a desired manner”.

Importance: With the help of following points, we can understand how motivation contributes to the success of an organisation:

(i) Improves Performance Level: The ability to do work and willingness to do work both affect the efficiency of a person. The ability to do work is obtained with the help of education and training and willingness to do work is obtained with the help of motivation. Willingness is more important in comparison to ability. This is possible only through motivation.

(ii) Helps to Change Negative or Indifferent Attitudes of Employees: Some employees of an organisation have a negative attitude. They always think that doing more work will not bring any credit. A manager uses various techniques to change this attitude. For example, if the financial situation of such an employee is weak, he gives him a raise in his remuneration and if his financial condition is satisfactory he motivates him by praising his work.

(iii) Reduction in Employee Turnover: The reputation of an organisation is affected by the employee turnover. A lot of time and money go waste in repeatedly recruiting employees and giving them education and training. Only motivation can save an organisation from such a wastage. Motivated people work for a longer time in the organisation and there is a decline in the rate of turnover.

(iv) Helps to Reduce Absenteeism in the Organisation: In some of the organisations, the rate of absenteeism is high. There are many causes for this — poor work conditions, poor relations with colleagues and superiors, no recognition in the organisation, insufficient reward, etc. A manager removes all such deficiencies and motivates the employees. Motivated employees do not remain absent from work as the workplace becomes a source of joy for them.

(v) Reduction in Resistance to Change: New changes continue taking place in the organisation. Normally, workers are not prepared to accept any changes in their normal routine. When it becomes essential to bring in some changes because of the demands of time, employees can be made to accept such changes easily with the help of motivation. Motivated people accept these changes enthusiastically and improve their work performance.

Robbins and Coulter have presented the following ‘Need-satisfying Process’ of motivation:

(i) Unsatisfied Need: At the first step of motivation, a person feels the need of something or there is a feeling that he lacks something.

(ii) Tension: The person concerned gets tensed at the very idea of his need not being satisfied.

(iii) Drives: Drive signifies some sort of tumult in the mind of the person concerned. At this step, the person concerned endeavours to fulfil his need. The fulfilment of need depends on the direction and intensity of the drive.

(iv) Search Behaviour: At this step, a person tries to discover different options to fulfil his need. He puts the best option into operation.

(v) Need Satisfied: If the option really happens to be a correct one, satisfaction is obtained.

(vi) Reduction of Tension: The person concerned gets his tension relieved when his need is satisfied.

Following are the main characteristics of motivation:

(i) Motivation is an Internal Feeling: Motivation is a psychological concept which lies within a person. First of all, some needs appear in the mind of an individual which affect his behaviour. He wants to do some work in order to satisfy those needs.

(ii) Motivation Produces Goal-directed Behaviour: Motivation is a power which leads the employees to the achievement of their goal. The behaviour of the motivated employees clearly shows that they are inclined towards the achievement of their goai. For example, promotion is a technique of motivation. The employees who desire to be promoted definitely improve their work performance.

(iii) Motivation can be either Positive or Negative: There are two types of employees from the point of view of motivation — laborious and shirkers. Those employees who are laborious in the true sense of the word are encouraged with some awards. This is called positive motivation. On the other hand, those workers who are by nature shirkers are encouraged to work with the threat of demotion, suspension or termination. Such people start working because of the fear factor. This is called negative motivation.

(iv) Motivation is a Complex Process: All the people working in an organisation have different nature. All have different needs. Therefore, everybody cannot be motivated with only one motivator. Keeping in mind the needs of the person concerned, monetary and non-monetary techniques are used. Therefore, it is a complex process.

There are two types of employees from the point of view of motivation — laborious and shirkers. Those employees who are laborious in the true sense of the word are encouraged with some awards. This is called positive motivation. On the other hand, those workers who are by nature shirkers are encouraged to work with the threat of demotion, suspension or termination. Such people start working because of the fear factor. This is called negative motivation.

(i) Unsatisfied Need  
(ii) Tension

(iii) Drives 
(iv) Search Behaviour

(v) Need Satisfied
 (vi) Reduction of Tension

(i) Motive: Motive means the hidden will power in an individual which impels or encourages him/her to work. This is an internal experience.

(ii) Motivation: Motivation means a process which excites people to work for the attainment of a desired object.

(iii) Motivators: Motivator refers to a technique which is employed to motivate people like bonus, status, etc.

In some of the organisations, the rate of absenteeism is high. There are many causes for this — poor work conditions, poor relations with colleagues and superiors, no recognition in the organisation, insufficient reward, etc. A manager removes all such deficiencies and motivates the employees. Motivated employees do not remain absent from work as the workplace becomes a source of joy for them.

On education and training.

On motivation.

Motive refers to the latent power of a person which impels him to do a work.

It means a process which excites people to work for the attainment of a desired objective.

Unsatisfied need.

(a) Improves performance level    (b) Reduction in employees turnover.

According to Maslow, an individual has many needs and their order can be determined. The moment an individual's first need, is satisfied, he gets worried about his next need. After the satisfaction of the second need, comes the third and this order continues till all his needs are satisfied. It is, therefore, clear that needs can be motivators. In order to satisfy needs an individual himself wants to work with vigour and full capacity.

Maslow has divided different human needs on the basis of priority into five parts which are shown in the following diagram:

Pyramid Representing Maslow’s Hierarchy of Needs

(i) Physiological Needs: In this category, those needs are included which need to be satisfied to keep a man alive. These needs include food, shelter, clothing and sleep, etc.

(ii) Safety or Security Needs: After physiological needs are satisfied, a man thinks about his safety. Safety needs include physical and economic needs. Physical safety refers to defence against accidents, attacks, diseases and other unexpected problems. Economic Safety means safety of livelihood and arrangement for old age.

(iii) Affiliation or Social Needs: Man is a social animal and wants to live in society honourably. It is, therefore, necessary that he should have friends and relatives with whom he can share his joys and sorrows.

(iv) Esteem and Status Needs: These needs are called ego needs. This means every human being wants to attain a higher status so that his power increases and he gets authority.

(v) Self-actualisation Needs: Self-actualisation needs refer to the desire to maximise whatever potential an individual possesses. For example, a musician wants to be proficient in music. Similarly, a poet wants to be a specialist in his field.

Esteem and Status Needs: These needs are called ego needs. This means every human being wants to attain a higher status so that his power increases and he gets authority.

In this category, those needs are included which need to be satisfied to keep a man alive. These needs include food, shelter, clothing and sleep, etc.

Following are the assumptions of Maslow’s theory:

(i) People’s behaviour, being affected by their needs.

(ii) There are many needs of people and their order or priority can be made.

(iii) Motivation ends with the satisfaction of needs. After that, the next higher need serves as a motivator.

(i) Maslow’s hierarchy of needs is not permanent. This changes according to the situation.

(ii) It is not necessary that the needs of only one category be strong at a time and the remaining remain unimportant.

Individual Need Hierarchy:-

(i) Hunger   (ii) Stability of Income

(iii) Friendship  (iv) Status

(v) Self-fulfilment.

Need hierarchy means the arrangement of needs in a particular order, such as:

(i) Physiological Needs  (ii) Safety Needs

(iii) Affiliation or Social Needs  (iv) Esteem and Status Needs

(v) Self-actualisation Needs.

Physiological needs.

Physiological needs.

It refers to defence against accidents, attacks, diseases and other unexpected problems.

 It refers to safety of livelihood and arrangement for old age.

It refers to defence against accidents, attacks, diseases and other emergencies.

There are many needs of people and their order can be made.

Maslow’s hierarchy of needs is not permanent.

Meaning: Monetary/Financial incentives are those incentives which are evaluated in terms of money.

Types: Following are the important types of monetary incentives:

(i) Pay and Allowances: Pay and allowances are the chief monetary incentives for every employee. Salary includes basic pay and dearness allowance alongwith other allowances. The employees remain motivated with the annual increment in pay and allowances.

(ii) Productivity Linked Wage Incentive: The employees can be motivated by linking productivity with their salary. In other words, the increment in salary will be in direct proportion of increase in productivity.

(iii) Bonus: Bonus refers to that payment to employees in addition to their regular remuneration which is paid as a reward of their good services. The bonus plan helps in establishing cordial relations between owners and employees. These days, the payment of bonus to employees is prevalent in almost all industries. The payment of bonus may be in cash or kind. For example, an employee can be given cash reward or sent abroad in recognition of his/her services.

(iv) Retirement Benefits: Every employee remains concerned about his future after retirement. If he is offered financial security for his post-retirement period, his future will be secured. This situation will certainly motivate him. Provident Fund and Gratuity are the best examples of post-retirement benefit.

(v) Perquisites: Perquisities are those facilities which an employee gets free from the employer e.g., rent free accommodation, car, facility of a servant, etc. These facilities play an important role in motivating the employees.

Non-monetary/Non-financial incentives are not directly related with money. These incentives help in the satisfaction of top hierarchy needs like respect, self-actualisation, etc.
Types: Following are the important types of non-monetary incentives:

(i) Status: Status means the position or rank of a person in the organisation. It can be high or low. The rank of an employee is directly linked with his authority, responsibility and other facilities (e.g., a separate cabin, costly furniture, car, peon, P.A. etc.). Everybody has a wish for a higher status. Therefore, the employees can be motivated by raising their rank or position. The attainment of a higher status fulfils the psychological, social and esteem-related needs.

(ii) Career Advancement Opportunity: Every employee of the organisation wants to advance in his life. Promotion is an important example of advancement. Training and development facilities have got to be provided for the promotion of the employees. Therefore, the managers can clear their way to promotion by providing these facilities. When the avenues for promotion are available, the employees certainly get motivated.

(iii) Employee Recognition Programmes: Every employee wishes to be considered as an important part of the organisation. It means that he should have his own identity and he should appear to be distinctive. The manager should distribute work among the employees in a manner that should give a feeling to every employee that his work is special and that he alone is capable of doing it. By getting such an importance, they are motivated and work harder and in a more responsible manner.

(iv) Employee Participation: Employees get encouraged to notice their participation in managerial works. Therefore, they offer their full cooperation in making successful the policies prepared with their help.

(v) Employee Empowerment: Employee empowerment means giving the employees more freedom to take decisions. When the decision-making power of the employees increases, they consider that they are doing some important work in the organisation. This feeling motivates them.

Finanical incentives:
(i) Pay and Allowances: Pay and allowances are the chief monetary incentives for every employee. Salary includes basic pay and dearness allowance alongwith other allowances. The employees remain motivated with the annual increment in pay and allowances.

(ii) Productivity Linked Wage Incentive: The employees can be motivated by linking productivity with their salary. In other words, the increment in salary will be in direct proportion of increase in productivity.

(iii) Bonus: Bonus refers to that payment to employees in addition to their regular remuneration which is paid as a reward of their good services. The bonus plan helps in establishing cordial relations between owners and employees. These days, the payment of bonus to employees is prevalent in almost all industries. The payment of bonus may be in cash or kind. For example, an employee can be given cash reward or sent abroad in recognition of his/her services.
Non-Financial incentives:

(i) Status: Status means the position or rank of a person in the organisation. It can be high or low. The rank of an employee is directly linked with his authority, responsibility and other facilities (e.g., a separate cabin, costly furniture, car, peon, P.A. etc.). Everybody has a wish for a higher status. Therefore, the employees can be motivated by raising their rank or position. The attainment of a higher status fulfils the psychological, social and esteem-related needs.

(ii) Career Advancement Opportunity: Every employee of the organisation wants to advance in his life. Promotion is an important example of advancement. Training and development facilities have got to be provided for the promotion of the employees. Therefore, the managers can clear their way to promotion by providing these facilities. When the avenues for promotion are available, the employees certainly get motivated.

(iii) Employee Recognition Programmes: Every employee wishes to be considered as an important part of the organisation. It means that he should have his own identity and he should appear to be distinctive. The manager should distribute work among the employees in a manner that should give a feeling to every employee that his work is special and that he alone is capable of doing it. By getting such an importance, they are motivated and work harder and in a more responsible manner.

(i) Bonus: Bonus refers to that payment to employees in addition to their regular remuneration which is paid as a reward of their good services. The bonus plan helps in establishing cordial relations between owners and employees. These days, the payment of bonus to employees is prevalent in almost all industries. The payment of bonus may be in cash or kind. For example, an employee can be given cash reward or sent abroad in recognition of his/her services.

There can be many reasons of giving bonus, such as:

(a) Regularly attending duty

(b) Contribution to high quality of production

(c) Contribution to high yield of production.

(ii) Profit Sharing: By profit sharing we mean providing share in profit of the organisation to the employees besides their regular remuneration (salary/wages). The main goal of this incentive plan is to create the feeling of ownership among the employees for their organisation.
Features:

(a) The employees participate only in profit.

(b) The percentage of share in the profit is decided in the beginning of the year.

(c) There can be no change in the percentage of the share of profit between the year once decided.

(iii) Co-partnership: “Co-partnership implies both profit sharing and control sharing”.

In short, it can be said that co-partnership is the plan by virtue of which employees become partners of the company. It improves the status of the employees. Consequently, they begin to take more interest naturally in the management of the organisation. Therefore, the efficiency of employees increases and a sense of responsibility develops in them.
Features:

(a) The employees are also the shareholders of the company.

(b) The employees get dividend on the issued shares.

(c) The employees also participate in the management due to their shareholding.

Following are the important types of non-monetary incentives:

(i) Status: Status means the position or rank of a person in the organisation. It can be high or low. The rank of an employee is directly linked with his authority, responsibility and other facilities (e.g., a separate cabin, costly furniture, car, peon, P.A. etc.). Everybody has a wish for a higher status. Therefore, the employees can be motivated by raising their rank or position. The attainment of a higher status fulfils the psychological, social and esteem-related needs.

(ii) Career Advancement Opportunity: Every employee of the organisation wants to advance in his life. Promotion is an important example of advancement. Training and development facilities have got to be provided for the promotion of the employees. Therefore, the managers can clear their way to promotion by providing these facilities. When the avenues for promotion are available, the employees certainly get motivated.

(iii) Employee Recognition Programmes: Every employee wishes to be considered as an important part of the organisation. It means that he should have his own identity and he should appear to be distinctive. The manager should distribute work among the employees in a manner that should give a feeling to every employee that his work is special and that he alone is capable of doing it. By getting such an importance, they are motivated and work harder and in a more responsible manner.

(iv) Employee Participation: Employees get encouraged to notice their participation in managerial works. Therefore, they offer their full cooperation in making successful the policies prepared with their help.

Job Enrichment: Job enrichment means increasing the importance of work. Such a job should have (i) authority, responsibility, and a wide scope for challenges, (ii) there should be a need of higher knowledge and experience, (iii) the opportunities for personal development should be available, and (iv) there should be absolute freedom to take decisions. The employees feel proud of getting such a job. Thus, job enrichment enhances people’s interest in their work and they start getting motivated automatically.

Job Security: Job security is an important non-monetary motivator. Security of job means a feeling of permanence and stability. For example, if an employee has a sense of fear or insecurity in his mind that he can be removed from his job any time, he will never work wholeheartedly and this worry continues troubling him. On the other hand, if he has a feeling that his job is secure and permanent and he cannot be removed from his job easily, he will work without any worry and with an easy mind. Consequently, his efficiency increases. This is the reason why people prefer a permanent job with less salary to a temporary job with high or more salary.

To satisfy the social and psychological needs non-financial incentives are needed. Types of non-financial incentives:

(i) Status: Status means the position or rank of a person in the organisation. It can be high or low. The rank of an employee is directly linked with his authority, responsibility and other facilities (e.g., a separate cabin, costly furniture, car, peon, P.A. etc.). Everybody has a wish for a higher status. Therefore, the employees can be motivated by raising their rank or position. The attainment of a higher status fulfils the psychological, social and esteem-related needs.

(ii) Career Advancement Opportunity: Every employee of the organisation wants to advance in his life. Promotion is an important example of advancement. Training and development facilities have got to be provided for the promotion of the employees. Therefore, the managers can clear their way to promotion by providing these facilities. When the avenues for promotion are available, the employees certainly get motivated.

(iii) Employee Recognition Programmes: Every employee wishes to be considered as an important part of the organisation. It means that he should have his own identity and he should appear to be distinctive. The manager should distribute work among the employees in a manner that should give a feeling to every employee that his work is special and that he alone is capable of doing it. By getting such an importance, they are motivated and work harder and in a more responsible manner.

(iv) Employee Participation: Employees get encouraged to notice their participation in managerial works. Therefore, they offer their full cooperation in making successful the policies prepared with their help.

(i) Bonus: Bonus refers to that payment to employees in addition to their regular remuneration which is paid as a reward of their good services. The bonus plan helps in establishing cordial relations between owners and employees. These days, the payment of bonus to employees is prevalent in almost all industries. The payment of bonus may be in cash or kind. For example, an employee can be given cash reward or sent abroad in recognition of his/her services.

There can be many reasons of giving bonus, such as:

(a) Regularly attending duty

(b) Contribution to high quality of production

(c) Contribution to high yield of production.

(ii) Profit Sharing: By profit sharing we mean providing share in profit of the organisation to the employees besides their regular remuneration (salary/wages). The main goal of this incentive plan is to create the feeling of ownership among the employees for their organisation. Features:

(a) The employees participate only in profit.

(b) The percentage of share in the profit is decided in the beginning of the year.

(c) There can be no change in the percentage of the share of profit between the year once decided.

(iii) Co-partnership: “Co-partnership implies both profit sharing and control sharing.”

In short, it can be said that co-partnership is the plan by virtue of which employees become partners of the company. It improves the status of the employees. Consequently, they begin to take more interest naturally in the management of the organisation. Therefore, the efficiency of employees increases and a sense of responsibility develops in them. Features:

(a) The employees are also the shareholders of the company.

(b) The employees get dividend on the issued shares.

(c) The employees also participate in the management due to their shareholding.

The type of the incentive offered to the employees is Job Security. It is one of the non-financial motivators:

(a) Job Security: Job security is an important non-monetary motivator. Security of job means a feeling of permanence and stability. For example, if an employee has a sense of fear or insecurity in his mind, that he can be removed from his job any time, he will never work wholeheartedly and this worry continues troubling him. On the other hand, if he has a feeling that his job is secure and permanent and he cannot be removed from his job easily, he will work without any worry and with an easy mind. Consequently, his efficiency increases. This is the reason why people prefer a permanent job with less salary to a temporary job with more salary.

(b) Employee Participation: Employees get encouraged to notice their participation in managerial works. Therefore, they offer their full cooperation in making successful the policies prepared with their help.

(a) Co-partnership: To issue shares to the employees at a price which is less than the market price is an example of co-partnership. It is one of the financial motivators. “Co-partnership implies both profit sharing and control sharing”.

In short, it can be said that co-partnership is the plan by virtue of which employees become partners of the company. It improves the status of the employees. Consequently, they begin to take more interest naturally in the management of the organisation. Therefore, the efficiency of employees increases and a sense of responsibility develops in them.

Features:

(a) The employees are also the shareholders of the company.

(b) The employees get dividend on the issued shares.

(c) The employees also participate in the management due to their shareholding.

(b) Profit Sharing: By profit sharing we mean providing share in profit of the organisation to the employees besides their regular remuneration (salary/wages). The main goal of this incentive plan is to create the feeling of ownership among the employees for their organisation. Features:

(a) The employees participate only in profit.

(b) The percentage of share in the profit is decided in the beginning of the year.

(c) There can be no change in the percentage of the share of profit between the year once decided.

According to Dubin, “Non-financial motivators are in the form of mental reward”. It means that they are not directly related with money. They are helpful to satisfy the top hierarchy needs, such as self-actualisation.

(i) Congratulating the employee for good work performance.

(ii) Presenting mementos.

(iii) Honouring for offering valuable suggestions.

Difference between Monetary and Non-monetary Incentives:

(a) Monetary Incentives (b) Non-monetary Incentives.

These refer to those incentives which are evaluated in terms of money.

It refers to that payment to employees in addition to their regular remuneration which is paid as a reward of their good services.

It refers to providing share in profit of the organisation to the employees besides their regular remuneration.

 (a) Provident Fund (b) Gratuity.

It refers to increasing the importance of work.

No, I do not agree with this statement because in the context of financial and non-financial motivators it is said that, “Financial and non-financial incentives are required to motivate the workers for harder work just as right and left foot both are essential for walking”. In other words, both have the same importance and it is essential to implement the both simultaneously. Following are the main non-financial motivators:
(i) Status: Status means the position or rank of a person in the organisation. It can be high or low. The rank of an employee is directly linked with his authority, responsibility and other facilities (e.g., a separate cabin, costly furniture, car, peon, P.A. etc.). Everybody has a wish for a higher status. Therefore, the employees can be motivated by raising their rank or position. The attainment of a higher status fulfils the psychological, social and esteem-related needs.

(ii) Career Advancement Opportunity: Every employee of the organisation wants to advance in his life. Promotion is an important example of advancement. Training and development facilities have got to be provided for the promotion of the employees. Therefore, the managers can clear their way to promotion by providing these facilities. When the avenues for promotion are available, the employees certainly get motivated.

(iii) Employee Recognition Programmes: Every employee wishes to be considered as an important part of the organisation. It means that he should have his own identity and he should appear to be distinctive. The manager should distribute work among the employees in a manner that should give a feeling to every employee that his work is special and that he alone is capable of doing it. By getting such an importance, they are motivated and work harder and in a more responsible manner.

(iv) Employee Participation: Employees get encouraged to notice their participation in managerial works. Therefore, they offer their full cooperation in making successful the policies prepared with their help.

(v) Employee Empowerment: Employee empowerment means giving the employees more freedom to take decisions. When the decision-making power of the employees increases, they consider that they are doing some important work in the organisation. This feeling motivates them.

Motivation plays an important role in the success of management. That is why it is said that ‘motivation is the core of management’. Following points clarify the importance of motivation:

(i) Improves Performance Level: The ability to do work and willingness to do work both affect the efficiency of a person. The ability to do work is obtained with the help of education and training and willingness to do work is obtained with the help of motivation. Willingness is more important in comparison to ability. This is possible only through motivation.

(ii) Helps to Change Negative or Indifferent Attitudes of Employees: Some employees of an organisation have a negative attitude. They always think that doing more work will not bring any credit. A manager uses various techniques to change this attitude. For example, if the financial situation of such an employee is weak, he gives him a raise in his remuneration and if his financial condition is satisfactory he motivates him by praising his work.

(iii) Reduction in Employee Turnover: The reputation of an organisation is affected by the employee turnover. A lot of time and money go waste in repeatedly recruiting employees and giving them education and training. Only motivation can save an organisation from such a wastage. Motivated people work for a longer time in the organisation and there is a decline in the rate of turnover.

(iv) Helps to Reduce Absenteeism in the Organisation: In some of the organisations, the rate of absenteeism is high. There are many causes for this — poor work conditions, poor relations with colleagues and superiors, no recognition in the organisation, insufficient reward, etc. A manager removes all such deficiencies and motivates the employees. Motivated employees do not remain absent from work as the workplace becomes a source of joy for them.

(v) Reduction in Resistance to Change: New changes continue taking place in the organisation. Normally, workers are not prepared to accept any changes in their normal routine. When it becomes essential to bring in some changes because of the demands of time, employees can be made to accept such changes easily with the help of motivation. Motivated people accept these changes enthusiastically and improve their work performance.

This statement is absolutely correct. It is based on Maslow’s Need Hierarchy Theory.
According to Maslow, an individual has many needs and their order can be determined. The moment an individual's first need, is satisfied, he gets worried about his next need. After the satisfaction of the second need, comes the third and this order continues till all his needs are satisfied. It is, therefore, clear that needs can be motivators. In order to satisfy needs an individual himself wants to work with vigour and full capacity.

Maslow has divided different human needs on the basis of priority into five parts which are shown in the following diagram:

Pyramid Representing Maslow’s Hierarchy of Needs

(i) Physiological Needs: In this category, those needs are included which need to be satisfied to keep a man alive. These needs include food, shelter, clothing and sleep, etc.

(ii) Safety or Security Needs: After physiological needs are satisfied, a man thinks about his safety. Safety needs include physical and economic needs. Physical Safety refers to defence against accidents, attacks, diseases and other unexpected problems. Economic Safety means safety of livelihood and arrangement for old age.

(iii) Affiliation or Social Needs: Man is a social animal and wants to live in society honourably. It is, therefore, necessary that he should have friends and relatives with whom he can share his joys and sorrows.

(iv) Esteem and Status Needs: These needs are called ego needs. This means every human being wants to attain a higher status so that his power increases and he gets authority.

(v) Self-actualisation Needs: Self-actualisation needs refer to the desire to maximise whatever potential an individual possesses. For example, a musician wants to be proficient in music. Similarly, a poet wants to be a specialist in his field.

The statement given in the question is regarding the importance of motivation. Following points clarify the importance of motivation:

(i) Improves Performance Level: The ability to do work and willingness to do work both affect the efficiency of a person. The ability to do work is obtained with the help of education and training and willingness to do work is obtained with the help of motivation. Willingness is more important in comparison to ability. This is possible only through motivation.

(ii) Helps to Change Negative or Indifferent Attitudes of Employees: Some employees of an organisation have a negative attitude. They always think that doing more work will not bring any credit. A manager uses various techniques to change this attitude. For example, if the financial situation of such an employee is weak, he gives him a raise in his remuneration and if his financial condition is satisfactory he motivates him by praising his work.

(iii) Reduction in Employee Turnover: The reputation of an organisation is affected by the employee turnover. A lot of time and money go waste in repeatedly recruiting employees and giving them education and training. Only motivation can save an organisation from such a wastage. Motivated people work for a longer time in the organisation and there is a decline in the rate of turnover.

(iv) Helps to Reduce Absenteeism in the Organisation: In some of the organisations, the rate of absenteeism is high. There are many causes for this — poor work conditions, poor relations with colleagues and superiors, no recognition in the organisation, insufficient reward, etc. A manager removes all such deficiencies and motivates the employees. Motivated employees do not remain absent from work as the workplace becomes a source of joy for them.

(v) Reduction in Resistance to Change: New changes continue taking place in the organisation. Normally, workers are not prepared to accept any changes in their normal routine. When it becomes essential to bring in some changes because of the demands of time, employees can be made to accept such changes easily with the help of motivation. Motivated people accept these changes enthusiastically and improve their work performance.

Meaning of Leadership: It refers to influencing others in such a manner to do what the leader wants them to do. Characteristics of Leadership:

(i) Influencing Process: Leadership is in the form of an influencing process. Here, influencing means bringing others under one’s own influence. A leader behaves with his followers in such a way that they automatically come under his influence. They start working as they are told by their leader. It is said that the exercise of influence is the essence of leadership.

(ii) Behaviour-changing Process: Leadership has the power to change the behaviour of their followers. A manager who has this ability gets a better work performance from his subordinates.

(iii) Interpersonal Relations between Leader and Followers: The chief requirement of leadership is the presence of followers. One cannot think of leadership without followers. Without followers, a leader has no existence. In order to make leadership meaningful, it is imperative to have followers (or employees) to work with him. Therefore, leadership indicates interpersonal relations between the leader and the followers.

(iv) Achieving Common Goals: A prominent feature of leadership is the achievement of common goals. It means it achieves not only the objectives of the organisation but also individual goals.

Out of all the four elements of directing (i.e., Supervision, Leadership, Communication and Motivation), leadership is at the top. Following points highlight the importance of leadership:

(i) Helps in Influencing the Behaviour of People: A manager influences his subordinates with his leadership ability. He brings them under his control in such a way that they put in their best effort to achieve the goals of the organisation. Good leaders always get good results through their followers.

(ii) Helps Followers in Fulfiling their Needs: A leader establishes personal relationship with his followers and tries to fulfil their needs. Why does a human group follow a particular person? It can be said in reply to this question — because that particular person provides them security, provides them the opportunities to earn wealth, gives them the right to work and tries to understand their feelings. That is why people follow him. A person who takes care of the above mentioned needs of the employees, they willingly accept him. Consequently, they work with complete dedication and enthusiasm.

(iii) Helps in Introducing Required Changes: These days the business environment is changing rapidly. In order to face the changing environment, many changes have got to be introduced in the organisation. Since the people already happen to be under the influence of the leader, he readily makes them agree to implement these changes. In this way, the possible opposition to the change is eliminated with the strength of leadership ability.

(iv) Helps in Solving Conflicts Effectively: A leader can solve every type of conflict (employees vs employees and employees vs employer) effectively under the weight of his influence. A leader always allows his followers the freedom to express their views. That is the reason that he easily understands the reality of the conflict. In this way, by understanding the nature of the conflict he tries to provide timely solution and minimises the possibility of adverse results.

(v) Helps in Training and Development of Subordinates: A leader proves helpful in the training and development of his subordinates. He provides them the information about the modern techniques of work. Not only this, he makes it possible for them to be good leaders in future.

Yes, I do agree with this statement: Following are the reasons.

(i) Helps in Influencing the Behaviour of People: A manager influences his subordinates with his leadership ability. He brings them under his control in such a way that they put in their best effort to achieve the goals of the organisation. Good leaders always get good results through their followers.

(ii) Helps Followers in Fulfiling their Needs: A leader establishes personal relationship with his followers and tries to fulfil their needs. Why does a human group follow a particular person? It can be said in reply to this question — because that particular person provides them security, provides them the opportunities to earn wealth, gives them the right to work and tries to understand their feelings. That is why people follow him. A person who takes care of the above mentioned needs of the employees, they willingly accept him. Consequently, they work with complete dedication and enthusiasm.

(iii) Helps in Introducing Required Changes: These days the business environment is changing rapidly. In order to face the changing environment, many changes have got to be introduced in the organisation. Since the people already happen to be under the influence of the leader, he readily makes them agree to implement these changes. In this way, the possible opposition to the change is eliminated with the strength of leadership ability.

(iv) Helps in Solving Conflicts Effectively: A leader can solve every type of conflict (employees vs employees and employees vs employer) effectively under the weight of his influence. A leader always allows his followers the freedom to express their views. That is the reason that he easily understands the reality of the conflict. In this way, by understanding the nature of the conflict he tries to provide timely solution and minimises the possibility of adverse results.

No, I do not agree with this statement. Leadership is needed for all. Following are the reasons:

(i) Helps in Influencing the Behaviour of People: A manager influences his subordinates with his leadership ability.

(ii) Helps Followers in Fulfiling their Needs: A leader establishes personal relationship with his followers and tries to fulfil their needs.

(iii) Helps in Introducing Required Changes: In order to face the changing environment, many changes have got to be introduced in the organisation. Since the people already happen to be under the influence of the leader, he readily makes them agree to implement these changes.

(iv) Helps in Training and Development of Subordinates: A leader proves helpful in the training and development of his subordinates.

I do agree with this statement. Following are the reasons:

(i) Management is wider term than leadership.

(ii) It is necessary for a manager to play the role of a leader.

(iii) It is not necessary for a leader to play the role of a manager.

All managers are leaders but all leaders are not managers. This statement is absolutely correct as management is wider term than leadership.

Difference between Managership and Leadership

This statement is correct. Following are the reasons of it:

(i) Helps in Influencing the Behaviour of People: A manager influences his subordinates with his leadership ability.

(ii) Helps Followers in Fulfiling their Needs: A leader establishes personal relationship with his followers and tries to fulfil their needs.

(iii) Helps in Introducing Required Changes: In order to face the changing environment, many changes have got to be introduced in the organisation. Since the people already happen to be under the influence of the leader, he readily makes them agree to implement these changes.

Motivation: It refers to the process which excites people to work for the attainment of a desired objective.

Leadership: It refers to influencing others in such a manner to do what the leader wants them to do.

Leadership means that quality which influences people for the attainment of a goal.

According to George R. Terry, “Leadership is the ability of influencing people to strive willingly for mutual objectives”.

Person who has the ability to influence others.

Microsoft.

Through influencing subordinates.

The scope of managership is wider than leadership.

It helps in influencing the behaviour of subordinates.

Meaning: It refers to that leadership style in which the leader tends to run the show all by himself.

Advantages:

(i) Quick and Clear Decisions: Because of the centralised authority all the decisions are taken by a single individual and hence there is no unnecessary delay and the decisions are comparatively clear.

(ii) Satisfactory Work: Since the work performance of the employees is under strict control, the quantity and quality of the work happen to be satisfactory.

Disadvantages:

(i) Lack of Motivation: This style does motivate the managers but it lowers the morale of the employees. This is natural because working in an environment of fear does lower their morale.

(ii) Agitation by Employees: Since the employees are not given any participation in taking decisions, they are turned into machines — working like machines incapable of doing anything of their own. Similarly, managers can make the employees do as they wish. The employees consider such a leadership style as uninteresting and oppose it.

(i) Autocratic Leadership Style:

Meaning: It refers to that leadership style in which the leader tends to run the show all by himself.

Characteristics:

(i) Centralised Authority: In this style, a manager is not prepared to share his authority and responsibility with others. Consequently, all the authority of work performance remains centralised.

(ii) Single-man Decisions: In this style of leadership, the manager himself takes all the decisions. He takes it for granted that he does not need any other individual.

(2) Democratic Leadership Style:

Meaning: It refers to that leadership style in which the leader consults with his subordinates before making any final decision.

Characteristics:

(i) Cooperative Relations: The chief characteristic of this style is the existence of cooperative relations among the managers and the employees. Participation in the management decisions gives the employees a feeling of self-respect, as a result of which the employees are always ready to be cooperative in every way.

(ii) Belief in Employees: The managers inherently believe that the employees by nature want to work, do their work with interest, accept their responsibility and try to perform their work in a good manner. This faith of the managers in the employees increases their morale.

(3) Laissez-faire or Free-rein Leadership Style:

Meaning: It refers to that leadership style in which the leader gives his subordinates complete freedom to make decisions. Characteristics:

(i) Full Faith in Subordinates: A prominent characteristic of this style is that the managers consider their subordinates capable, active and responsible individuals and have full faith in them.

(ii) Independent Decision-making System: In this style, the management-related decisions are taken by the subordinates instead of the managers. They can, however, consult the managers.

Meaning: It refers to that leadership style in which the leader gives his subordinates complete freedom to make decisions.

Characteristics:

(i) Full Faith in Subordinates: A prominent characteristic of this style is that the managers consider their subordinates capable, active and responsible individuals and have full faith in them.

(ii) Independent Decision-making System: In this style, the management-related decisions are taken by the subordinates instead of the managers. They can, however, consult the managers.

(iii) Decentralisation of Authority: This style is based on the principle of decentralisation. It means that the managers widely distribute their authority to enable every individual to determine his objective and make his plans accordingly. The managers only perform the function of coordination, direction and general control.

(iv) Self-directed, Supervisory and Controlled: After having once explained the objectives, the only job of the manager is to interfere only in adverse situations. The supervision and control is done by the employees themselves.

Meaning: It refers to that leadership style in which the leader consults with his subordinates before making any final decision.

Advantages:

(i) High Morale: Under this style, the enthusiasm of the managers and the employees is sky-high. Both consider each other their well-wishers.

(ii) Creation of More Efficiency and Productivity: Since the employees are participants in the decision making, they give full cooperation in implementing them. In this way their efficiency increases.

Disadvantages:

(i) Requirement of Educated Subordinates: The chief characteristic of this leadership style is that the subordinates are made partners in taking decisions, so much so that some little affairs are left to them. Such a cooperation can be expected only from the educated employees.

(ii) Delay in Decisions: It is clear that while taking decisions the subordinates are always consulted. This makes it a long process.

Advantages:

(i) Development of Self-confidence in Subordinates: When all the authority in their work performance is given to the employees, they become habituated in taking decisions which creates self-confidence in them. They start doing better work in future.

(ii) High-level Motivation: When the manager gives the subordinates all the authority by showing full confidence in them they start considering themselves an important part of the concern. In this way they, start feeling that they are not a part of the enterprise but are the enterprise itself. With the onset of this feeling, there is nothing left in their motivation.

Disadvantages:

(i) Difficulty in Cooperation: Since there is no close supervision and control by the managers, everybody starts functioning independently. Some employees with opposite point of view become a hurdle in the attainment of objectives of other people. Such people do not work themselves, nor can they see others work. It becomes difficult for the manager to establish coordination among such employees.

(ii) Lack of Importance of Managerial Post: In this leadership style, the post of a manager is rendered less important because he does not make any plan, or take any decision or exercise any control.

(i) Centralised Authority: In this style, a manager is not prepared to share his authority and responsibility with others. Consequently, all the authority of work performance remains centralised.

(ii) Single-man Decisions: In this style of leadership, the manager himself takes all the decisions. He takes it for granted that he does not need any other individual.

(iii) Wrong Belief regarding Employees: The manager is a victim of the thinking that the employees do not work when motivated by love and they require hard control. Impelled by this thought, managers take the help of the centralised leadership style.

Meaning: It refers to the methods with the help of which a manager establishes his influence on his subordinates.

Types of Leadership Styles:

(i) Autocratic Leadership Style

(ii) Democratic Leadership Style.

It refers to that leadership style in which the leader tends to run the show all by himself.

It refers to that leadership style in which the leader consults with his subordinates before making any final decision.

It refers to that leadership style in which the leader gives his subordinates complete freedom to make decisions.

Meaning of Communication: It refers to passing information from one person to another.

Importance of Communication: According to a research, a manager spends 90% of his time in this process. The importance of communication can be understood with the help of the following study:

(i) Acts as Basis of Coordination: Today, in industrial units the form of the organisation is decided by division of work. To get the work done successfully, coordination among various activities is needed. For the purpose of coordination, it is essential that the people should have a mutual understanding regarding the goals of the organisation and they should know the means with the help of which these goals can be accomplished. They should also have the knowledge about the relationship of their activities. This is possible only with the help of effective communication.

(ii) Helps in Smooth Working of an Enterprise: Communication begins with the thought of establishing an enterprise and continues till its closure. All the decisions taken in the organisation and all the activities being carried on therein depend on communication.

(iii) Acts as Basis of Decision Making: Before taking any decision, many sorts of information have to be collected on the basis of which an idea is given the final shape. Information connected with the decision making can be obtained only with the help of communication. Not only this, but the use of communication is made for the purpose of effectively implementing the decisions.

(iv) Increases Managerial Efficiency: It is through communication that the managers pass on the information about the objectives laid down, issue directions, divide work and control the activities of the subordinate employees. Therefore, in the absence of communication a manager remains an inactive part of the organisation while the presence of communication increases his efficiency.

(v) Establishes Effective Leadership: In order to become an efficient leader, a manager must possess the knowledge of the art of communication. In other words, in the absence of the knowledge of effective communication, it is futile to think of leadership. A manager can become an efficient leader by improving the art of communication.

Communication process has been shown in the following diagram:

(i) Sender/Communicator: Sender is the person who sends his ideas to another person.

(ii) Message: It includes opinion, feelings, views, attitude, orders, suggestion, etc. For example, the work plan to be explained by the manager is in the shape of ideas.

(iii) Encoding: Anything thought about by the sender is a mental state, which means that something to be communicated has been thought of. Communicating this idea or thinking with the help of symbols, words or diagrams is called encoding.

(iv) Media/Transmission: A person who is anxious to send a message has to make use of some medium for communication. There can be many media of communication like face-to-face conversation, letters, internet chatting, telephone, E-mail, symbols, etc. During the transmission of a message it is very important to keep the media of transmission free from noise.

(v) Decoding: The sender can send his ideas briefly in the form of symbols or diagrams. Understanding it correctly is called decoding.

(vi) Receiver: A receiver is a person for whom the message is sent.

(vii) Feedback: Feedback is a signal pointing out to what extent the receiver has really received and understood the sender's message correctly.

(viii) Noise: Noise is the hindrance in the process of communication. It creates hurdle in the way of conversation. It can take place at any step in the communication process.

Importance of Communication: According to a research, a manager spends 90% of his time in this process. The importance of communication can be understood with the help of the following study:

(i) Acts as Basis of Coordination: Today, in industrial units the form of the organisation is decided by division of work. To get the work done successfully, coordination among various activities is needed. For the purpose of coordination, it is essential that the people should have a mutual understanding regarding the goals of the organisation and they should know the means with the help of which these goals can be accomplished. They should also have the knowledge about the relationship of their activities. This is possible only with the help of effective communication.

(ii) Helps in Smooth Working of an Enterprise: Communication begins with the thought of establishing an enterprise and continues till its closure. All the decisions taken in the organisation and all the activities being carried on therein depend on communication.

(iii) Acts as Basis of Decision Making: Before taking any decision, many sorts of information have to be collected on the basis of which an idea is given the final shape. Information connected with the decision making can be obtained only with the help of communication. Not only this, but the use of communication is made for the purpose of effectively implementing the decisions.

(iv) Increases Managerial Efficiency: It is through communication that the managers pass on the information about the objectives laid down, issue directions, divide work and control the activities of the subordinate employees. Therefore, in the absence of communication a manager remains an inactive part of the organisation while the presence of communication increases his efficiency.

(v) Establishes Effective Leadership: In order to become an efficient leader, a manager must possess the knowledge of the art of communication. In other words, in the absence of the knowledge of effective communication, it is futile to think of leadership. A manager can become an efficient leader by improving the art of communication.
(vi) Boosts Morale and Provides Motivation: Effective communication helps in boosting the morale of the employees and motivates them. For example, if the employees are made partners in the process of decision-making, it will give them an identity of their own in the organisation. In such a situation, they will definitely be motivated and their morale will be at the highest level.

This statement is absolutely correct. Following points of the importance of communication prove the correctness of this statement:

(i) Acts as Basis of Coordination: Today, in industrial units the form of the organisation is decided by division of work. To get the work done successfully, coordination among various activities is needed. For the purpose of coordination, it is essential that the people should have a mutual understanding regarding the goals of the organisation and they should know the means with the help of which these goals can be accomplished. They should also have the knowledge about the relationship of their activities. This is possible only with the help of effective communication.

(ii) Helps in Smooth Working of an Enterprise: Communication begins with the thought of establishing an enterprise and continues till its closure. All the decisions taken in the organisation and all the activities being carried on therein depend on communication.

(iii) Acts as Basis of Decision Making: Before taking any decision, many sorts of information have to be collected on the basis of which an idea is given the final shape. Information connected with the decision making can be obtained only with the help of communication. Not only this, but the use of communication is made for the purpose of effectively implementing the decisions.

(iv) Increases Managerial Efficiency: It is through communication that the managers pass on the information about the objectives laid down, issue directions, divide work and control the activities of the subordinate employees. Therefore, in the absence of communication a

manager remains an inactive part of the organisation while the presence of communication increases his efficiency.

(v) Establishes Effective Leadership: In order to become an efficient leader, a manager must possess the knowledge of the art of communication. In other words, in the absence of the knowledge of effective communication, it is futile to think of leadership. A manager can become an efficient leader by improving the art of communication.

Yes, I do agree with this statement. Following are the reasons of it:
(i) Acts as Basis of Coordination: Today, in industrial units the form of the organisation is decided by division of work. To get the work done successfully, coordination among various activities is needed. For the purpose of coordination, it is essential that the people should have a mutual understanding regarding the goals of the organisation and they should know the means with the help of which these goals can be accomplished. They should also have the knowledge about the relationship of their activities. This is possible only with the help of effective communication.

(ii) Helps in Smooth Working of an Enterprise: Communication begins with the thought of establishing an enterprise and continues till its closure. All the decisions taken in the organisation and all the activities being carried on therein depend on communication.

(iii) Acts as Basis of Decision Making: Before taking any decision, many sorts of information have to be collected on the basis of which an idea is given the final shape. Information connected with the decision making can be obtained only with the help of communication. Not only this, but the use of communication is made for the purpose of effectively implementing the decisions.

(i) Sender/Communicator (ii) Message

(iii) Encoding (iv) Media/Transmission

(v) Decoding (vi) Receiver.

It refers to ‘common’, meaning thereby common among two or more persons.

No, not at all. It is sufficient to only understand the message.

No, communication can be both direct (face to face) or indirect.

It refers to some obstruction or hindrance to communication.

It refers to a signal pointing out to what extent the receiver has really received and understood the sender's message correctly.

(i) Acts as basis of coordination.

(ii) Helps in smooth working of an enterprise.

Use of ambiguous symbols in encoding.

Communication is an art of transferring ideas, facts and feelings, etc., from one person to another and making them understandable.

Informal communication refers to interchange of information unofficially. Through it, the superiors gather such information from their subordinates as may be difficult to get through formal communication. Except this, it provides many such advantages which are not possible in formal communication. These advantages provide strength to the formal communication.

Advantages: The informal channel of communication has the following advantages:

(i) Fast and Effective Communication: Under this communication, the messages move fast and their effect is equally great on the people.

(ii) Free Environment: Informal communication is done in a free environment. Free environment means that there is no pressure of any office — big or small. The attached reactions of the employees can easily be collected.

(iii) Better Human Relations: Informal communication saves the employees from tension. Freedom from tension helps the establishment of better human relations. This also affects favourably the formal communication.

(iv) Easy Solution of the Difficult Problems: There are many problems which cannot be solved with the help of formal communication. There is more freedom in informal communication which helps in using difficult problems.

(v) Satisfying the Social Needs of the Workers: Everybody wants good relations with the high officers at the place of his work. Such relations give satisfaction to the employees and they feel proud. But this can be possible only with the help of the informal communication.

Advantages: The formal communication has the following advantages:

(i) Maintenance of Authority of the Officers: Formal communication maintains constant relations among the superiors and the subordinates. As a result, the dignity of the line superiors is maintained. Consequently, it is convenient to control the subordinates and fix their responsibility.

(ii) Clear and Effective Communication: In formal communication, there is a direct contact among the managers and the subordinates. Both understand the capability, habits, feelings, etc. of one another. Managers know as to when and under which conditions their subordinates need information. In this way, this communication is capable of making available timely information. Hence, it is clear and effective.

(iii) Orderly Flow of Information: The information has to pass through a definite route from one person to another. Hence, the flow of information is systematic.

Limitations: Following are the disadvantages or limitations of the formal communication:

(i) Overload of Work: In a modern business organisation, much information, many messages and other things have to be communicated. Under formal communication, they are routed through a definite channel and this consumes much of the time of the superiors and thus some other important works are left unattended.

(ii) Distortion of Information: This method can be a hindrance in the flow of information. Sometimes the distance between the sender and the receiver is so big that the information has to pass through many hands and by the time it reaches the receiver it is distorted.

(ii) Overlooking by the Officers: The officers do not pay much attention to the suggestions and complaints of the subordinates. They overlook them taking them to be works of daily routine.

Meaning: It refers to interchange of information unofficially.

Advantages: The informal channel of communication has the following advantages:

(i) Fast and Effective Communication: Under this communication, the messages move fast and their effect is equally great on the people.

(ii) Free Environment: Informal communication is done in a free environment. Free environment means that there is no pressure of any office — big or small. The attached reactions of the employees can easily be collected.

(iii) Better Human Relations: Informal communication saves the employees from tension. Freedom from tension helps the establishment of better human relations. This also affects favourably the formal communication.

Limitations: The defects or limitations of the informal communication are as under:

(i) Unsystematic Communication: This communication is absolutely unsystematic and it is not necessary that information reaches the persons concerned.

(ii) Unreliable Information: Most of the information received through this communication is undependable and no important decision can be taken on its basis.

The following four networks of the grapevine are in vogue:

(i) Single Standard: In this form of communication, a person says something to his confidant who, in turn, passes on the information to a person of his confidant and in this way a chain starts moving. This creates a sort of chain which has been shown in diagram (i) The signs of cross shown at the top and bottom of the diagram show that the chain can move up and down both ways upto any extent.

(ii) Gossip Chain: In this form of communication, a person communicates something to a number of persons during the course of a gossip. A particular person in an organisation knows something specific that happens to be interesting. He tells this thing to all the members of his group and some other people also. Normally such an information is not related to the job. For example, two employees of the organisation are going in for a love marriage and some particular person has got this information, he passes on this information to a large number of people. Gossip chain is shown in diagram (ii). In this diagram, Mr ‘A’ is passing on his information to B, C, D, E, F, G, H, I, etc.

(iii) Probability: In this form of communication, a person remains indifferent about the fact as to whom he should pass on the information. There are numerous people around him. He passes on the information randomly to somebody around him. Those who get the information also have many people around them. They also pass on the information randomly to somebody else. In this way, this chain moves. The diagram (iii) shows that A has four persons around — F, B, D and J but he passes on the information to F and D only. He has not deliberately chosen F and D but it happens as a matter of chance. The same is the position of F and D. F is passing on the information to K and G while D is passing on the information to H. This chain will continue to move in this manner.

(iv) Cluster: In this form of communication a person tells something to selected individuals. Those who receive the information further pass it on to another set of selected individuals. In this way, this chain moves on. In every organisation, some people have good liaison with other persons. Such people pass on this information to persons of their choice with the purpose of getting some favour from them. Cluster is shown in diagram (iv). This figure makes it clear that A passes on the information received to B, C and D. B and C do not tell it to anybody else but D tells it to E, F and G. Similarly, E and F do not pass it on to anybody else but G passes it on to H and I. In this way, this chain moves on.

Formal communication is of two types:

(i) Vertical Communication:

(a) Downward Communication

(b) Upward Communication

(ii) Horizontal Communication.

All these types have been clarified in the following diagram:

(i) Vertical Communication: It refers to that communication which flows vertically, i.e., upwards or downwards through formal channels.

(a) Downward Communication: The communication by top hierarchy with their subordinates is called downward communication. This communication includes orders, rules, information, policies, instructions, etc.

(b) Upward Communication: This is quite the reverse of the downward communication. This flows from the subordinates to the superiors. The subject-matter of this communication includes suggestions, reactions, reports, complaints, etc.

(ii) Horizontal Communication: It refers to that communication which flows horizontally between two individuals of the same level through formal channels. The above diagram shows that the communication between a manager and a manager, between a foreman and a foreman and between a worker and a worker is horizontal communication. The subject-matter of horizontal communication includes information, requests, suggestions, mutual problems and coordination-related information.

The way in which formal communication is done, is known as formal communication network. It is given below:

Formal communication can be done in different ways — it may be vertical communication or horizontal communication. The different forms of formal communication network are shown in the above diagram.

(i) Chain Communication: Chain communication refers to the communication between a superior and a subordinate All the people in an organisation from top to bottom are linked with the help of a scalar chain as is shown in diagram (1). A is placed at the highest rank, B is a subordinate of A, C is the subordinate of B, D is the subordinate of C and E is the subordinate of D.

(ii) Wheel Communication: In this form of communication all the subordinates of a superior talk to one another through his medium. The superior works as a hub of a wheel. In the second diagram, A is the superior and B, C, D and E are the subordinates. All the four subordinates communicate through the medium of A.

(iii) Circular Communication: This communication takes place among the members of a group. Every member of a group can communicate with the nearest two members. In diagram (3), A can have communication with B and E. Similarly, B can have communication with A and C. The same applies to all the members of the group. In this case the communication moves at a slow speed.
(iv) Free Flow Communication: This form of communication also takes place among the different members of the group. Its special feature is that every member of the group can talk to all the other people in the group. This is clarified in diagram (4). A can talk directly to B, C, D, E. In the same way, B can talk directly to A, C, D, E. The same applies to all the members of the group. In this case, the communication moves at a rapid pace.

(v) Inverted ‘V’ Communication: In this form of communication, a subordinate is permitted to communicate with the boss of his boss. In this form of communication, the messages move at a rapid speed. In the diagram (5), C and D are the subordinate of B who in turn is a subordinate of A. Here, C and D can talk directly to A who happens to be the boss of B.

(a) The communication used in the example is formal.

(b) Following are the two networks of the formal communication:

(i) Chain Communication: Chain communication refers to the communication between a superior and a subordinate All the people in an organisation from top to bottom are linked with the help of a scalar chain as is shown in diagram (1). A is placed at the highest rank, B is a subordinate of A, C is the subordinate of B, D is the subordinate of C and E is the subordinate of D.

(ii) Wheel Communication: In this form of communication all the subordinates of a superior talk to one another through his medium. The superior works as a hub of a wheel. In the second diagram, A is the superior and B, C, D and E are the subordinates. All the four subordinates communicate through the medium of A.

It is called horizontal communication. Following are the reasons of its necessity:

(i) To solve the problems of similar nature by the same level managers

(ii) To get the benefit of the experience of other people.

It is the case of informal communication. Following are its limitations:
The defects or limitations of the informal communication are as under:

(i) Unsystematic Communication: This communication is absolutely unsystematic and it is not necessary that information reaches the persons concerned.

(ii) Unreliable Information: Most of the information received through this communication is undependable and no important decision can be taken on its basis.

In this form of communication, a person communicates something to a number of persons during the course of a gossip. A particular person in an organisation knows something specific that happens to be interesting. He tells this thing to all the members of his group and some other people also. Normally such an information is not related to the job. For example, two employees of the organisation are going in for a love marriage and some particular person has got this information, he passes on this information to a large number of people. Gossip chain has been shown in diagram. In this diagram, Mr ‘A’ is passing on his information to B, C, D, E, F, G, H, I, etc.

In this form of communication, a subordinate is permitted to communicate with the boss of his boss. In this form of communication, the messages move at a rapid speed. In the diagram, C and D are the subordinate of B who in turn is a subordinate of A. Here C and D can talk directly to A who happens to be the boss of B.

This communication takes place among the members of a group. Every member of a group can communicate with the nearest two members. In the diagram, A can have communication with B and E. Similarly, B can have communication with A and C. The same applies to all the members of the group. In this case the communication moves at a slow speed.

It refers to interchange of information officially.

 It refers to interchange of information unofficially.

It refers to a pathway of informal communication in which the information moves in a zigzag manner leaving no indication from which point it started.